Justice Department Forces PRPs to Pay Up for N.J. Superfund Cleanup

Jul 26, 2010

Champion Chemical Company, Imperial Oil Company Inc. and Imperial’s two former officers have agreed to pay at least $1.4 million to resolve actions to enforce a prior agreement to reimburse cleanup costs incurred by the federal government at the Imperial Oil Company Inc. /Champion Chemical Company Superfund Site in Marlboro Township, N.J., the Department of Justice and the Environmental Protection Agency announced on July 22.

According to the terms of the settlement filed in federal court in Trenton, N.J., Champion and Imperial will pay more than $1 million and Imperial’s two former officers, Scott Stevens and George Kulick, will pay $360,000 to satisfy the companies’ obligations according to a 2001 consent decree. The 2001 consent decree resolved the companies’ liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for past cleanup costs incurred by the United States and the state of New Jersey in connection with the site. According to that decree, the companies committed to make future monthly and annual payments based on Imperial’s gross profits. On March 29, 2007, the United States filed a motion to enforce the 2001 decree, seeking more than $1 million in payments that Champion and Imperial failed to make, as well as stipulated penalties. The United States also filed a claim under the Federal Debt Collection Procedures Act against Stevens and Kulick, alleging that excessive salaries they received beginning in 2001 constituted fraudulent conveyances from Imperial of assets that should have been paid to the federal government.

In addition to the $1.4 million payment, the United States will receive all of the net proceeds from the sale of the site, which is owned by Champion, and proceeds from the companies’ remaining insurance coverage. The settlement ensures that the United States will receive all remaining non-bankruptcy assets of both Imperial, which is in Chapter 7 bankruptcy, and Champion, which is a dormant company with no assets other than the site.

"Under Superfund, parties responsible for damaging the environment are required to pay for the cost of the toxic cleanup," said EPA Regional Administrator Judith A. Enck. "This New Jersey case is a testament to EPA's hard work to uphold a basic principle of the Superfund law -- the polluter pays."

Groundwater at the 15-acre site is contaminated by volatile organic compounds, polychlorinated biphenyls (PCBs) and metals, among other contaminants. Additionally, the surface soil at the site is contaminated with heavy metals, including chromium, lead and arsenic, as well as PCBs. To date, the site has been addressed by EPA and the New Jersey Department of Environmental Protection. EPA has conducted numerous cleanup activities at the site, including the removal of a waste clay pile and arsenic contaminated soil from adjoining residential properties.

The consent decree, lodged in the U.S. District Court for the District of New Jersey, is subject to a 30-day public comment period and approval by the federal court.